Brazilian billionaire Eike Batista is in talks to sell his shipbuilding business, OSX Brasil SA, to Sete Brasil Participacoes SA in exchange for a stake in the startup oil-rig operator, according to two people with direct knowledge of the matter.
OSX would combine with Sete Brasil to provide services to Petroleo Brasileiro SA, said the person, who asked not to be identified because the negotiations are private. OSX, based in Rio de Janeiro, has a market capitalization of 3.6 billion reais ($1.8 billion). Talks are in an early stage and may not result in a deal, the people said.
Sete Brasil plans to spend about $27 billion by 2020 building deep-water drilling vessels that will be rented by Petroleo Brasileiro in so-called pre-salt fields off Brazil’s southern coast. The reservoirs are under about 6,500 feet (1,981 meters) of water and beneath 16,400 feet of sub-sea bedrock, sand and salt. Petrobras, as the state-controlled oil company is known, is developing the region, which holds at least 50 billion barrels of oil.
Sete Brasil Chief Executive Officer Joao Ferraz said on Sept. 19 that the company was close to raising 3.7 billion reais in additional capital, boosting its total equity to 11.3 billion reais.
Banco BTG Pactual SA’s private-equity funds invested $1 billion in Sete Brasil, more than doubling their stake in the oil-rig operator to 30 percent, four people with direct knowledge of the deal said in August.
EIG Global Energy Partners LLC, a Washington-based private-equity firm, also invested in the Rio de Janeiro-based company as part of the 5.4 billion reais capital increase, the people said.
Officials at EBX Group, which owns OSX, declined to comment and asked not to be named in accordance with company policy. A Sete Brasil official said its directors aren’t currently negotiating a merger or acquisition with any other companies.
BTG, Banco Santander Brasil SA and Banco Bradesco SA all held 13.7 percent stakes in Sete Brasil before the capital increase. Santander’s holding declined to 6.9 percent, while Bradesco, which didn’t buy additional stock, had its participation reduced to about 3 percent, the people said.
Pension funds Petros and Funcef each held 19.2 percent before the capital increase, while Previ and Valia, which are also pension funds, had 10 percent and 5.5 percent, respectively. Petrobras held the remaining 5 percent and is keeping its stake.